Among a host of best practices and other tips lenders should consider for complying with the CFPB’s new Home Mortgage Disclosure Act rule is coordinated institutional planning, according to Ellen Costa, vice president of strategy and business capability development at Wells Fargo Home Lending. Speaking to attendees at the recent regulatory compliance conference sponsored by the American Bankers Association, Costa said, “All of the CFPB's regulatory changes – HMDA in particular – mean significant change management within your institution. It is a best practice to be very agile and proactive about coordinating a project plan that includes a strategy upfront, really understanding what the regulations are driving at.” A solid plan developed ahead of time and properly executed will allow a clear ...

If you’re a mortgage lender waiting for your first examination from the CFPB, there are three important principles you should be aware of, according to Burton Embry, executive vice president and chief compliance officer of Primary Residential Mortgage, based in Salt Lake City, UT. Delivering a presentation during a webinar sponsored by the California Mortgage Bankers Association last week, Embry began with the obvious: Consumer protection. “One of the CFPB’s big focuses is on consumers. It’s all about consumer protection, we all know that,” he said. “So when they are looking at your policies and procedures, for example, that’s one of the things they are looking at: the risk to consumers.”In other words, “How have you written your policies ...

FHA lenders will face stiffer maximum monetary penalties later this year for various violations of agency rules and regulations. The higher monetary penalties are the result of legislation signed into law late last year requiring federal agencies to adjust the current maximum penalty amounts for inflation in order to maintain their deterrent effect. Specifically, the Federal Civil Penalties Inflation Adjustment Act of 2015 (2015 Act) requires federal agencies to adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule and subsequent annual adjustments for inflation. The interim final rules with the initial penalty adjustments must be published by July 1, 2016. The new penalty levels must take effect no later than Aug. 1, 2016. Additionally, agencies are required to make annual inflation adjustments, starting Jan. 15, 2017, and for each year going forward. The adjustments will ...

FHA Revises TOTAL Mortgage Scorecard. Effective on June 11, 2016, the FHA’s TOTAL Mortgage Scorecard no longer returns either upfront or annual mortgage insurance premium factors to an automated underwriting system. The FHA directs lenders to consult Appendix I of its Single Family Housing Policy handbook for applicable MIP factors. AUS vendors have been notified of the change and have adjusted their systems accordingly. HUD, First Citizens Bank Settle Fair Lending Complaint. A South Carolina bank has agreed to correct its lending practices and allocate funding to resolve allegations that it denied more loans to minorities compared to similarly-situated white loan applicants. The settlement agreement stemmed from a complaint filed by the Department of Housing and Urban Development against First Citizens Bank and Trust Co. in 2011 after an analysis of ...

A coalition of multi-sectoral groups is urging the Consumer Financial Protection Bureau to work with other federal agencies to provide strong protections for mortgage applicants and homeowners who have limited English proficiency (LEP). The Americans for Financial Reform, an umbrella organization for more than 200 civil rights, consumer, labor, business, investors, faith-based, and civic and community groups, said that while the CFPB has taken steps to assist LEP consumers, the agency and federal banking regulators should go further to make the mortgage marketplace fully and fairly accessible to these consumers. “Mortgage origination and servicing must be...

The CFPB’s pending Home Mortgage Disclosure Act rule significantly expands the industry’s data-reporting requirements – and the risk of possible disclosure of a borrower’s personal information along with it – something the bureau still has not addressed to the industry’s satisfaction, according to one top attorney. “The implementation date of the rule is fast approaching and the mortgage industry still has not received any answers in regards to their data privacy concerns,” Craig Nazzaro, of counsel in the Atlanta office of the Baker Donelson law firm, said in a blog posting earlier this month. He noted that mortgage industry representatives have repeatedly raised their privacy concerns about the new rule with the bureau. However, “the CFPB has thus far avoided addressing these ...

A paper recently published by the Treasury Department’s Office of Financial Research detailed links between changes in underwriting standards at banks and the banks’ loan application denial rates and mortgage performance. While the findings are intuitive, the paper from the OFR was the first to match individual lenders’ confidential responses to the Federal Reserve’s Senior Loan Officer Opinion Survey with data from the Home Mortgage Disclosure Act. “We find...

Mortgage lending continues to be a key priority for the CFPB’s Office of Fair Lending for supervision and enforcement, particularly Home Mortgage Disclosure Act data integrity and potential fair lending risks in the areas of redlining, underwriting and pricing, the bureau said in a new report. Last year, the bureau brought to an end two important public enforcement actions that had to do with mortgage lending. The first was a redlining case against Hudson City Savings Bank, which was required to pay almost $33 million in direct loan subsidies, funding for community programs and outreach, and a civil penalty. In this case, the CFPB accused Hudson City of providing unequal access to credit by structuring its business to avoid providing ...

A preliminary analysis of 2015 Home Mortgage Disclosure Act reports suggests that loan denial rates declined slightly last year. ComplianceTech, a supplier of fair lending and HMDA technologies for lenders and others, recently released an “EarlyLook” at its online Lending Patterns database of HMDA reports. A group of 175 lenders had a combined $730.9 billion in mortgage originations last year, up 35.7 percent from its volume back in 2014. The 175 aren’t necessarily the ...

Mortgage banking industry representatives told the CFPB it should not be in a rush to make any changes to its resubmission guidelines for data that will be submitted under the bureau’s new Home Mortgage Disclosure Act rule. Because of continuing problems in implementing the integrated disclosure rule, “companies have not yet had available sufficient resources to begin HMDA implementation in earnest,” the Mortgage Bankers Association told the bureau in a recent comment letter. “Also, considering the unprecedented expansion of data elements required under the new HMDA rule, it can be anticipated that when implementation begins, there will be a far better understanding of myriad issues including appropriate resubmission guidelines.” Consequently, MBA said that while some changes may now be warranted, ...